March 2016 - RIP Dodd Frank

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SECONDARY
MARKET
THE LATEST
FHFA Refocuses
HARP Awareness
Amid New Numbers
New #HARPNow campaign targets borrowers
in Florida, Illinois, Michigan, and more.
F
or a program that was
only supposed to be
temporary, the Home
Affordable Refinance
Program (HARP) is still going
rather strong.
In mid-February, the Federal
Housing Finance Agency (FHFA)
released its Q 4 2015 totals for
loans refinanced through HARP.
FHFA reported that 21,079
HARP refinances were com
-
pleted between September and
December, bringing the grand
total up to nearly 3.381 million
since the program's 2009 launch.
According to the agency, 28
percent of all HARP refinances
for underwater borrowers—those
with a loan-to-value ratio greater
than 105 percent—were for 15-
and 20-year mortgages, through
December. Such loans help bor
-
rowers build equity faster than
traditional 30-year mortgages,
and FHFA found that borrow-
ers who refinanced through
HARP had a lower delinquency
rate compared to HARP-eligible
borrowers who did not refinance
through the program.
FHFA also estimated that as of
Q 3 2015, more than 367,600 bor
-
rowers nationwide still have a
financial incentive to refinance
through HARP before the pro-
gram expires this December.
To get through to the large
pool of homeowners who could
still take advantage of HARP, the
FHFA is starting a social media
campaign called #HARPNow.
The initiative will be focusing its
outreach efforts mainly on the 10
states with the highest number of
borrowers thought to be "in-the-
money," meaning they meet the
basic HARP eligibility require
-
ments, have a remaining mortgage
balance of $50,000 or more, have
a remaining term of greater than
10 years, and have an interest rate
at least 1.5 percent higher than
current market rates.
The states with the most
eligible borrowers, in order,
are Florida, Illinois, Michigan,
Ohio, Georgia, California,
Pennsylvania, New Jersey, New
York, and Maryland. Florida, in
fact, has nearly as many eli
-
gible borrowers as Illinois and
Michigan combined, with 51,100
HARP-eligible borrowers.
FHFA has teamed up with the
Treasury, Fannie Mae, Freddie
Mac, and local housing experts
for town hall-style events in
Chicago, Miami, Detroit, Phoenix,
Atlanta, Newark, and Columbus
throughout 2016. FHFA estimates
these borrowers could save as
much as $2,400 a year on their
mortgage payments.
Deutsche Bank Prepares
to Tackle Legal, Law
Enforcement Troubles
CEOs call the organization 'absolutely rock solid.'
S
ince the close of the
financial crisis, Ger-
many's largest bank,
Deutsche Bank, has
faced several settlements related
to violations of U.S. sanctions,
rigging of interest-rate bench
-
marks, and allegations that it
defrauded mortgage issuers Fan-
nie Mae and Freddie Mac.
Now, the bank is ready to
resolve its legal and law enforce-
ment problems. As of February
10, the bank has paid over $9.3
billion in fines and legal settle-
ments since 2008, according to
a Bloomberg article.
In addition to dealing with a
variety mortgage-backed securi
-
ties suits, Deutsche Bank is also
facing an investigation by U.S.
and U.K. authorities over whether
its internal controls failed to catch
some $10 billion in transactions
that may have moved money out
of Russia, Bloomberg reported.
In August 2015, the 5th U.S.
Circuit Court of Appeals in New
Orleans revived a lawsuit filed
by the Federal Deposit Insurance
Corp., which accused Deutsche
Bank, Goldman Sachs, and the
Royal Bank of Scotland of fraud.
The accusations stem from $840
million in mortgage-backed secu
-
rities that were sold to a Texas
bank that later failed, according
to multiple media reports.
In a December 2013 case,
Deutsche Bank said it would
pay $1.9 billion to settle claims
that it defrauded Fannie Mae
and Freddie Mac in the sale of
mortgage-backed securities before
the 2008 financial crisis, accord
-
ing to an article from Reuters.
"Today's agreement marks an-
other step in our efforts to resolve
the bank's legacy issues, and we
intend to make further progress
in this regard throughout 2014,"
said co-CEOs Juergen Fitschen
and Anshu Jain in a statement.
In a note to employees, co-
CEO John Cryan said the bank
is "absolutely rock solid" and has
a plan to cover its legal costs. "I
am personally investing time to
resolve successfully and speedily
open regulatory and legal cases.
A small group of senior people,
led by me, will focus on this."
3.381 M
Total loans refinanced through HARP
since the program's 2009 launch.
"I am personally investing
time to resolve successfully
and speedily open
regulatory and legal cases.
A small group of senior
people, led by me, will
focus on this."
—John Cryan, CEO, Deutsche Bank